Inflationary Thresholds, Financial Development and Economic Growth: New Evidence from Two West African Countries

2017 ◽  
Vol 17 (2) ◽  
pp. 20160042 ◽  
Author(s):  
Bernard Njindan Iyke ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Inflation Rate ◽  
Data Availability ◽  
Development Economic ◽  
African Countries ◽  
Inflation Rates ◽  
New Evidence ◽  
Threshold Range

This paper examines the role of inflationary threshold effects in the finance-growth relationship for Ghana and Nigeria. Ghana and Nigeria are relatively homogenous in terms of financial development, economic growth, and inflationary history and therefore provide an acceptable choice for this empirical analysis. Due to lack of data availability, the sample spans the period 1964–2011 for Ghana and 1961–2011 for Nigeria. Using appropriately specified threshold regressions, we found inflationary thresholds in both countries during the study periods. Specifically, the inflationary threshold range for Ghana is 10.73 %–29.83 %. For Nigeria, the inflationary threshold range is 10.07 %–19.25 %. By estimating the threshold regressions, we found financial development to have positive and significant effect on economic growth during low and moderate inflationary regimes; and insignificant effect on growth during high inflationary regimes, for both countries. In particular, financial development impact greatly on growth in Ghana when the rate of inflation is below a threshold of 10.73 % but dissipates when inflation rate reaches and exceeds 29.83 %. Similarly, financial development impact greatly on growth in Nigeria when the rate of inflation is below a threshold of 10.07 % but dissipates when inflation rate reaches and exceeds 19.25 %. The results imply that policymakers in these countries should take inflation into account when devising policies to promote financial development with the aim of generating economic growth. For without low or moderate inflation rates, such policies will not achieve their intended purposes.

scholarly journals What is the role of Financial Development and Energy Consumption on Economic Growth?

2014 ◽  
Vol 3 (1) ◽  
pp. 137-149
Author(s):  
Doaa Mohamed Salman ◽  
Eyad Atya
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
North African ◽  
African Countries ◽  
Policy Makers ◽  
Applied Model ◽  
North African Countries ◽  
Relationship Of

This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error coreection model and Granger causaility test to analyza a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.

scholarly journals What is the role of Financial Development and Energy Consumption on Economic Growth? New Evidence from North African Countries

2016 ◽  
Vol 3 (1) ◽  
pp. 137
Author(s):  
Doaa Mohamed Salman ◽  
Eyad M. Atya
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
North African ◽  
African Countries ◽  
Policy Makers ◽  
Applied Model ◽  
North African Countries ◽  
Relationship Of ◽  
New Evidence

<p>This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error coreection model and Granger causaility test to analyza a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.</p>

ICT, Financial Development, Economic Growth and Electricity Consumption: New Evidence from Malaysia

2019 ◽  
pp. 097215091881689 ◽  
Author(s):  
Sakiru Adebola Solarin ◽  
Muhammad Shahbaz ◽  
Habib Nawaz Khan ◽  
Radzuan Bin Razali
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Electricity Consumption ◽  
Development Economic ◽  
New Evidence

scholarly journals The Nexus Between Financial Development, Economic Growth and Poverty Alleviation: PMG-ARDL Estimation

ETIKONOMI ◽  
2021 ◽  
Vol 20 (1) ◽  
pp. 1-12
Author(s):  
Benjamin Korankye ◽  
Zuezhou Wen ◽  
Michael Appiah ◽  
Louisa Antwi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Policy Implications ◽  
Development Economic ◽  
African Countries ◽  
Causality Test ◽  
Long Run ◽  
Short Run

This study aims to find out the connections between financial development, economic growth, and poverty using panel data from 1985 to 2017 in fourteen African countries that many previous researchers ignore. The study deploys a dynamic Granger causality test to trace the nexus between financial development, economic growth, and poverty reduction in Africa in the long run. First, the upshots suggest a gross domestic product, gross capital formation, price of household consumption, and government expenditure substantially impacting poverty. Besides that, the result also shows a bi-directional in the long run using a PMG estimator. The findings broadly support the view that there is a stable, short-run relationship between financial development, economic growth, and poverty in the error correction terms. However, other variables show no causal relationship in the short run. In practicality, this study suggested some policy implications and supported governmental policies to reduce economic hardship on financial institutions.JEL Classification: G10, O47, I39, C33How to Cite:Korankye, B., Wen, X., Appiah, M., & Antwi, L. (2021). The Nexus Between Financial Development, Economic Growth, and Poverty Alleviation: PMG-ARDL Estimation. Etikonomi: Jurnal Ekonomi, 20(1), 1 – 12. https://doi.org/10.15408/etk.v20i1.15908.

Remittances, Economic Growth and Poverty: A Case of African OIC Member Countries

2018 ◽  
Vol 57 (2) ◽  
pp. 121-143
Author(s):  
Nasim Shah Shirazi ◽  
Sajid Amin Javed ◽  
Dawood Ashraf
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Poverty Reduction ◽  
Simultaneous Equation ◽  
Equation Model ◽  
Annual Data ◽  
Simultaneous Equation Model ◽  
African Countries ◽  
Alternative Source ◽  
The Impact

This paper investigates the impact of remittance inflows on economic growth and poverty reduction for seven African countries using annual data from 1992-2010. By using the depth of hunger as a proxy for poverty in a Simultaneous Equation Model (SEM), we find that remittances have statistically significant growth enhancing and poverty reducing impact. Drawing on our estimates, we conclude that financial development level significantly increases the remittances inflows and strengthens poverty alleviating impact of remittances. Results of our study further show a signficant interactive imapct of remittances and finacial develpment on economic growth, suggesting the substitutability between remittance inflows and financial development. We further find that 3 percentage point increase in credit provision to the private sector (financial development) can help eliminate the severe depth of hunger in the region. Remittances, serving an alternative source of private credit, can be effective in this regard. Keywords: Remittance Inflow, Poverty Alleviation, Financial Development, Simultaneous Equation Model

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